Nursing home hospice provider kept patients in hospice for years, overbilled for their care, prosecutors charge

Jury hands down $3.3 million verdict against CO nursing home in negligence case

An Illinois-based hospice provider overbilled Medicare and Medicaid by inappropriately designating nursing home residents as hospice patients, sometimes for years, according to federal charges announced Monday. The hospice administrator also took money for his personal accounts and obstructed justice, the prosecutors claim.

The defendant is 46-year-old Seth Gillman of Lincolnwood, IL. He is the administrator, corporate agent and one-quarter owner of Passages Hospice LLC, based in the Chicago suburb of Lisle, according to the U.S. Attorney's Office for the Northern District of Illinois. He also is agent and secretary of Asta Healthcare Company Inc., which operates nursing homes throughout Illinois.

Residents of Asta nursing homes sometimes received hospice services through Passages for years, even though life expectancy is supposed to be six months or less to qualify for hospice reimbursements through federal health programs, the charges state.

Passages billed for more than 2,000 days of hospice for one Asta resident, the U.S. Attorney's office stated. Between 2006 and 2011, 22% of Passages patients had more than six months of hospice care, according to Medicare claims data cited by the prosecutors.

Gillman also is facing charges that he overbilled for services provided to Passages patients. He trained nurses to identify dubious reasons for bumping patients from hospice to general inpatient care, which resulted in hundreds of dollars in additional daily Medicare reimbursements per claim, the authorities contend.

Starting in 2008, Gillman instituted a bonus system tied to reimbursements for general inpatient care, according to the charges. Through this system, he allegedly rewarded himself in excess of $830,000.

Federal authorities also have slapped Gillman with two obstruction of justice charges. When a Medicare auditor requested patient files in 2009 and 2010, Gillman had Passages employees alter the documents, according to a 69-page affidavit filed in support of the charges.

Reached by phone, an employee of Passages declined to comment for McKnight's.

If convicted, Gillman faces up to 15 years in prison, according to the U.S. Attorney's office. Investigators with the U.S. Attorney, the Department of Justice, the Federal Bureau of Investigation and the Department of Health and Human Services Office of the Inspector General worked on the case.

Drug substitutions saved the government $13 million last year, but more drug substitutions under Medicare Part B would have saved an additional $6 million, the Office of Inspector General for Health and Human Services concluded in a recent report to Congress.